The recapitalised Uganda Development Bank has revised its long term financing lending rates to promote its mandate of transforming Uganda from October 1.
In an interview recently, Ms Patricia Adongo Ojangole announced that the bank is lowering its interest rates by 26 per cent. The long-term financing has been reduced to 12.5 per cent from 17 per cent, the medium- term financing from 18 per cent to 13 per cent while the short-term financing is falling to 14 per cent from 19 per cent.
She said the bank was forced to cut the interest rates because of absence of cheaper development finance in the country, which has been identified as a hindrance to the growth of private-sector development in key sectors like agriculture, value addition, industry and health.
She said the bank has identified crops like sorghum, Irish potatoes, tea and sugar cane where organised farmer groups which are adding value to the crops can be bank-rolled by managing their risks through crop insurance.
“We must collect the money back because we are not only banking the farmer groups but also the off-taker by creating the market for the farmer through the off taker who in this case is the person involved in value addition,” she said.
According to Mr Daniel Kaggwa, the director finance, government early this year committed a 400 per cent shareholder capital to the bank by increasing the funding from Shs100 billion to Shs500 billion.